Southampton's parent company enters administration
Southampton Football Club have confirmed this morning that its parent club, Southampton Leisure Holdings, have gone into administration.
Share prices of the company were halted from trading yesterday, and 24 hours later, the company has gone into administration.
Mark Fry and David Hudson from Begbies Traynor have been appointed as administrators, and Fry tried to clarify the situation by speaking to the club's official website.
"Southampton Football Club has a long history in English football, and could be an extremely attractive investment for the right buyer.
"We are working hard to preserve the value of the football club and produce a positive outcome for all stakeholders, and I ask that fans continue show their support for the team for the remainder of the season, as we seek to show the best face possible to potential investors."
Elsewhere, Southampton Leisure Holdings chairman Rupert Lowe and football chairman Michael Wilde have stepped down from their roles, along with director Andrew Cowen. It seems slightly ironic that finance director David Jones is the only board member to keep his job.
The holding company has been put into administration with debts of £27.5m, reportedly made up of financial liabilities of £23.1m and an overdraft of £4.4m.
There may be a silver lining for Southampton however, as they might not have to face a 10-point deduction that would all but condemn them to League One football next season.
Football League rules state that as it's the parent company and NOT the football club that has entered administration, the club itself should not be held responsible for their parent company mismanaging their finances.
However, despite that rule, it is widely thought that it could still be at the discretion of the Football League as to whether they impose a points penalty on Southampton, with the powers that be set to meet on Tuesday to decide what action to take.
A similar situation occurred in 2003, when Derby County's parent company entered administration, but the Rams descaped being hit with a 10-point deduction.
The harsh reality is that Southampton Football Club need to find a buyer before the end of the season, otherwise the loyal supporters could end up without a club at all.